GEF-6 GEF Secretariat Review for Full-sized/medium-sized projects
The GEF/ldcf/sccf Trust Fund

  
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GEF ID:	9370	
Country/Region:	Regional (Indonesia, Philippines)	
Project Title:	The Meloy Fund : A Fund for Sustainable Small-scale Fisheries in SE Asia (Non-grant)	
GEF Agency:	CI	GEF Agency Project ID:		
Type of Trust Fund:	GEF Trust Fund	GEF Focal Area (s):	Biodiversity	
GEF-6 Focal Area/ LDCF/SCCF Objective (s):	BD-3 Program 6; 	
Anticipated Financing  PPG:	$200,000	Project Grant:	$6,000,000	
Co-financing:	$35,199,864	Total Project Cost:	$41,199,864	
PIF Approval:		Council Approval/Expected:	April 01, 2016	
CEO Endorsement/Approval		Expected Project Start Date:		
Program Manager:	Leah Karrer	Agency Contact Person:	Miguel Morales	

PIF Review	
Review Criteria	Questions	Secretariat Comment 	
Agency Response 	
Project Consistency	1.	Is the project aligned with the relevant GEF strategic objectives and results framework?	Jan 22, 2016 (lkarrer): No. The rationale for BD Program 6 (Maintaining integrity and function of globally significant coral reefs ) is well explained drawing on GBO-4.  Paragraphs 1 -3 in particular explain how managing fisheries relates to improving globally significant coral ecosystems. Subsequent paragraphs explain the global importance of the region's coral reefs as well as the socioeconomic importance of the fisheries.

With regard to Aichi Targets, the PIF articulates the tie to Strategic Goal B of the Aichi Biodiversity Target. However, SMART indicators are not identified. Please provide.

Feb 3, 2016 (lkarrer): Yes. Cleared.		
	2.	Is the project consistent with the recipient country’s national strategies and plans or reports and assessments under relevant conventions?	Jan 22, 2016 (lkarrer): No, Overall the project is consistent with current initiatives in both Indonesia and Philippines, which are well described and tabled. GEF projects are well identified except for two projects. The description notes briefly coordination with CFI Indonesia.  

a) Now that the CFI Indonesia project has identified plans for the Adabi Fund, please clarify how the two funds are distinct, yet coordinated, so that they do not duplicate, but benefit form each other. This is important to ensuring the projects are not creating too many funds in the same region, which has been a lessons learned from previous experience with funds.

b) In addition, the GEF/UNDP Global Sustainable Supply Chains for Marine Commodities project (GEF #5271) has pilot efforts in 4 countries, including Philippines and Indonesia, which are highly relevant particularly regarding linking supply chains (although they are working at a more global scale). Please consider how to link with this effort.

Feb 3, 2016 (lkarrer): Yes. Cleared.	
	
Project Design	3.	Does the PIF sufficiently indicate the drivers of global environmental degradation, issues of sustainability, market transformation, scaling, and innovation? 	Jan 22, 2016 (lkarrer): Yes.The PIF well articulates the core institutional, environmental and economic drivers of reef degradation ranging from poor coastal planning to intensifying typhoons to insufficient economic alternatives.  This project emphasizes market transformation by providing economic  incentives and fair market access to motivate better management and sustainable fisheries practices. Sustainability is addressed through the Fund, which will ensure long-term support through many partners.  This effort is innovative in addressing the sustainability of small-scale fisheries by focusing on the business aspects of the industry, such as ensuring market access, improving assets/equipment as well as providing technical assistance. By de-risking investment, the Fund enables private capital to scale-up these initiatives in Philippines and Indonesia.  Furthmore, through CI and RARE's global network of on-the-ground activities, including Fish Forever's focus in 3 neighboring nations, as well as communication with fisheries projects in the region, the project is anticipated to be scaled-up.		
	4.	Is the project designed with sound incremental reasoning?	Jan 22, 2016 (lkarrer): Yes. The baseline conditions and incremental contribution are well articulated.		
	5.	Are the components in Table B sound and sufficiently clear and appropriate to achieve project objectives and the GEBs?	Jan 22, 2016 (lkarrer): No. There are a few concerns that need to be addressed.
 
a) Please clarify that the Meloy Fund will follow the Practice Standards for Conservation Trust Funds (PSCTF) developed by the Conservation Finance Alliance as appropriate realizing that the PSCTF relates to funds that only provide grants.  

b) In addition, the PIF  needs to clarify that the process for establishing and operating the Trust Fund will incorporate the factors articulated in the GEF Finance for Biodiversity Conservation Trust Funds: A Checklist, including the Fund will require a co-financing ratio (minimum 1:1) that will need to be met in order for this project to invest GEF funds.  
 
c) During PPG, please clarify the governance structure so that we can understand the design, including to ensure there are no conflicts of interest between the IA (CI), Rare and the Fund, specifically as potential investment recipients. 

d) Furthermore for the Pro Doc there needs to be clarity on how in-region stakeholders, including  governments, will play a role in the fund.

e) Committments to the Fund from the list of funders seems ambitious by endorsement, but would be impressive.  Please clarify agency confidence that these commitments can be confirmed by CEO endorsement. 

f) Please clarify how the frameworks would be invested. It is relatively intuitive how the framework for infrastructure would work with the loan going toward buying infrasturure and similarly for the aquaculture framework.  However, it is not clear how the framework for creating market demand would work.  For example, would a loan go to new eco-buyers to help start their businesses to create demand?
  
g) In the interest of building in-region capacity and ensuring long-term sustainability, priority needs to be in having in-region ownership and administration of the fund, instead of Rare which is VA based.  The Abadi Fund (through CFI Indonesia â€“ CI as IA), for example, is planned to be owned and administered by organizations in Singapore and Indonesia.   Please clarify if regional ownership can be prioritized.

h) With regard to Knowledge Management description, during PPG consideration needs to be given not only how to share this project experience (which is what is primarily described in the PIF), but also how the project will learn from other relevant efforts such as the Abadi Fund.

i) Regarding the funding terms assumptions in paragraph 50 on page 20, please describe the risk assessment for the investments, given that there are many barriers facing these small businesses and fishers. Also, please describe if the interest rate and equity are market based or concessional. We are interested in a brief description of the business model for clients to prosper and pay back the debt/equity.

j) Regarding the request in paragraph 52 for GEF-SEC concurrence in advance, this is probable and can be confirmed at CEO endorsement after more is known about the investment committee and other operational parameters.

k) Regarding the fund structure, please justify the experience and capacity of RARE to act as the General Partner (GP). The terms for the GP appear standard for commercial operations, but less so for impact investment operations. Please clarify RARE's intention on use of returns as the GP, as noted in paragraph 57.

l) Please clarify the concept for "RARE board members serving as LP fund investors" noted in paragraph 57. Will these board members be invested as individuals? Please describe any potential conflict of interest.

Feb 3, 2016 (lkarrer): Yes. Cleared.		
	6.	Are socio-economic aspects, including relevant gender elements, indigenous people, and CSOs considered? 	Jan 22, 2016 (lkarrer): Yes. The project emphasizes bottom-up approaches and has strong ties with indigenous communities and CSOs, which are listed by category in the PIF. In addition gender equality is a priority within the project and  a Gender Mainstreaming Plan will be developed during the PPG phase.		
Availability of Resources
	7.	Is the proposed Grant  (including the Agency fee) within the resources available from (mark all that apply):			
	•	The STAR allocation?	Jan 22, 2016 (lkarrer): Yes. Funds may be available through NGI based on the requirement that the project is justified by BD.		
	•	The focal area allocation?			
	•	The LDCF under the principle of equitable access			
	•	The SCCF (Adaptation or Technology Transfer)?			
	•	Focal area set-aside?			
Recommendations	8.	Is the PIF being recommended for clearance and PPG (if additional amount beyond the norm) justified?	Jan 22, 2016 (lkarrer): No. Please address points above in boxes 1, 2, and 5.

Feb 3, 2016 (lkarrer): Yes. Cleared.		
Review Date
	Review	January 22, 2016		
	Additional Review (as necessary)			
	Additional Review (as necessary)			

CEO endorsement Review	
Review Criteria 	Questions	Secretariat Comment at CEO Endorsement	
Response to Secretariat comments  	
Project Design and Financing	1.	If there are any changes from that presented in the PIF, have justifications been provided?			
	2.	Is the project structure/ design appropriate to achieve the expected outcomes and outputs?			
	3.	Is the financing adequate and does the project demonstrate a cost-effective approach to meet the project objective? 			
	4.	Does the project take into account potential major risks, including the consequences of climate change, and describes sufficient risk response measures? (e.g., measures to enhance climate resilience)			
	5.	Is co-financing confirmed and evidence provided?			
	6.	Are relevant tracking tools completed?			
	7.	Only for Non-Grant Instrument: Has a reflow calendar been presented?			
	8.	Is the project coordinated with other related initiatives and national/regional plans in the country or in the region?			
	9.	Does the project include a budgeted M&E Plan that monitors and measures results with indicators and targets?			
	10.	Does the project have descriptions of a knowledge management plan?			
Agency Responses 
	11.	Has the Agency adequately responded to comments at the PIF stage from:			
	•	GEFSEC 			
	•	STAP			
	•	GEF Council			
	•	Convention Secretariat			

Recommendation 	12.	Is CEO endorsement recommended?			
Review Date	Review			
	Additional Review (as necessary)			
	Additional Review (as necessary)